5 Steps to owning your own property in Germany
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Loading... - Gloria Vega
- 08 May 2023
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Many individuals yearn to be homeowners, seeking a secure and tranquil family life or additional revenue from leasing an apartment or house. However, the intricate steps necessary to achieve this dream and the issues requiring clarification along the way are not always evident to those with homeownership aspirations.
It is essential to develop a structured approach rather than succumbing to a property's charm, followed by discovering unaffordability and forfeiting the dream and a brighter future. Here are five critical steps you must undertake to make owning a property a reality.
- Cognize your figures Before even contemplating home-hunting, it is crucial to grasp your financial capabilities. Calculate your net monthly income and subtract expenses for bills, food, insurance, and pastimes. This will provide an estimate of what remains for monthly mortgage payments.
You will require equity for the deposit, and if savings are meager, focusing on building them might prove beneficial as higher equity amounts increase the likelihood of securing a mortgage. Combining both values will enable using a mortgage calculator to determine potential property affordability.
- Next, explore the market to obtain an idea of property prices in the area of interest. Prices vary depending on size, location, age, and region. This research may compel you to be flexible on certain aspects of the "dream house," such as moving to another area, settling for a smaller kitchen or garden, or fewer bedrooms. This will prepare you for house-hunting.
Comprehend the process After scanning online listings and selecting a property of interest, contact the responsible person for the sale, typically either the property owner or a real estate agent. Usually, property owners enlist real estate agents to aid in the selling process. The agent accompanies you and your family to the property, responding to any inquiries you may have. If you fancy the property and intend to make an offer, all communication will go through the estate agent.
Once your proposal is accepted, you will likely need to secure a loan to purchase the property. To do so, you must apply for a mortgage, either directly from a bank or through a mortgage broker, who can simplify the process. Loan approvals are challenging, but collaborating with a broker can ease the process.
- The next step is to consult a notary to handle all legal aspects of the property sale. Keep in mind that in Germany, all conversations and documents for these procedures are solely in German.
When it comes to securing a loan for a property, there are several factors that must be taken into account. These include the duration for which you wish to lock in your interest rate, your monthly payment capabilities, and whether or not you would like the option to make unscheduled payments. It's important to remember that the loan you receive will always be tied to the specific property you are purchasing. If you decide to switch properties after already securing a mortgage, you will need to inform your provider so that they can help you find an alternative solution.
- In addition to your deposit and monthly mortgage repayments, it's important to keep in mind that there are various other expenses associated with purchasing a property. For instance, real estate agents are allowed to charge fees to both the buyer and seller, and a land transfer tax must also be paid. This tax varies depending on the specific federal state in which you are purchasing.
Your notary will charge a fee for the land registration, as well as additional fees for the work they have done on the property transfer. You may also wish to hire a surveyor to assess the structural condition of the property before finalizing your purchase. This service comes at an additional cost, and you must also consider the cost of moving itself.
- When purchasing a property, there are many documents that must be read, received, and understood. These include the loan contract and offer, notary documents, and documents from the land register and surveyor. Since most of these documents will be in German, it's important to have a clear understanding of their contents to avoid any unpleasant surprises in the future. You may choose to have these documents translated, or work with an expert who can help relay this important information to you. An expert can also accompany you to notary appointments and provide assistance throughout the entire property purchase process.
